Shanghai-based Greenland Holdings, the mainland’s fourth-largest developer by sales, reported flat earnings for the first half of this year as governments tightened their grip on the real estate sector.

Net income in the six months to June was valued at 4.66 billion yuan (US$704 million), up by a slender 1.3 per cent from a year ago and below analysts’ estimates. Revenue jumped 16.6 per cent to 126 billion yuan.

Factoring out one-off gains, the company’s underlying profit fell 18.7 per cent year on year to 4 billion yuan.

The first-half profits represented 49.3 per cent of the projected earnings for the whole year.

“The external environment will remain complicated in the second half,” said chairman Zhang Yuliang in a statement. “We need to assess the situations comprehensively, objectively and dialectically.”

Greenland predicts the government’s measures to cool the property sector will continue in the second half, but it believes serviced apartments and hotels may become bright spots as housing demand remains strong.

Property businesses raked in sales of 64.8 billion yuan in the first half, up 14.9 per cent from the year-ago period.

Authorities in Shanghai have launched stringent measures ranging from buying restrictions and higher down payments to price interventions since early last year.

Greenland has been accelerating its diversification into non-property businesses such as finance and commerce to pursue new growth engines.

Last month, it agreed to sell its property management unit to its Guangdong rival Agile Property Holdings, netting a one-time gain of 993 million yuan.

Greenland’s debt-to-asset ratio stood at 89.05 per cent at the end of June, 0.42 percentage points lower than 89.47 per cent on December 31, 2016.

The company had no plans to distribute cash dividends.

“For property developers, it is important to improve profitability amid the current market conditions,” said Zhang. “Strategically, we need to grasp good opportunities and tactically it’s necessary to fine-tune management.”

To cap the soaring home prices, the mainland authorities have been encouraging would-be buyers to rent properties, rather than owning them.

The central government recently introduced a pilot programme in 12 major cities where tenants of rental properties will enjoy the same access to public services as property owners.

Greenland spent 19.1 billion yuan to boost its land bank in the first half, purchasing plots with gross floor area of 7.45 million square metres.

Greenland’s A shares gained 1.7 per cent on Monday to 7.68 yuan. So far this year, its shares have lost 9.2 per cent.